The recent blocking of Wu Xiaobo, one of China’s most prominent economic commentators, from Weibo for commenting about the country’s stock market and unemployment rate suggests that there is increasing unease among the Chinese leadership that the economy is heading into a slump and want to keep negative news about the economy under control. Online media accounts of Health Insight and Media Camp were recently blocked for exposing Covid-related scandals during the pandemic and trends in the news industry, respectively.
In recent times the Chinese government has increased crackdown on commentators and media outlets who have posted negative sentiments about the Chinese economy. Well-known economist Ren Zeping was banned from Weibo last year after posting comments on the falling birth rate. Hong Hao, an outspoken Chinese market strategist, was ousted from state-owned brokerage BoCom International over his bearish market commentaries. The Chinese Communist Party has for decades relied on a strong economy as a key source of its legitimacy and any negative news on the economy is increasingly being subject to censorship. The leadership is concerned that negative economic news would challenge the very message that they have tried to put across to the public that the economy is doing well. Topics such as consumers cutting back on spending, local governments struggling with debt repayments, unemployment, lay-offs by bankrupt private companies and inefficiency at state-owned companies are increasingly off-limits.
Earlier, as the mortgage boycotts spread across the country, Chinese authorities went into overdrive to censor documents tallying the number of homebuyers refusing to pay mortgages, information of projects that were stalled and images of letters from homebuyers declaring that they refused to pay. This stopped a key source of data for global investors and other homeowners tracking the property crisis in China. Since the Chinese Communist Party has been boasting about lifting people out of poverty, unemployment has also become a sensitive issue for the Chinese government. Recently, the Cyberspace Administration of China announced that it would crack down on anyone who publishes videos or posts that show sadness, incite polarisation and information that damages the image of the Party and the government. It banned sad videos of old people, disabled people and children.
The government is nervous that the negative news on the Chinese economy could fuel discontentment among its population. The leadership had expected the economy to take off after the removal of Covid restrictions. However, the recovery has been stalled due to property sector weakness, slower than expected consumer spending, increasing local debt and trade headwinds. Youth unemployment has hit a record 20.8%. China’s stock market index has also badly underperformed.
The censorship on economic news is likely to increase concern among foreign investors about the state of the Chinese economy. Already with increased crack down on the Chinese online networks relied upon by hedge funds and on financial data providers giving detailed data on domestic companies to overseas clients, the investment outlook is deteriorating. Leading American banks in Beijing, Goldman Sachs and JP Morgan, were ordered to censor financial reports on the Chinese economy last October before the 20th Communist Party Congress. The steps to block negative economic news are in line with the broader pattern of the Xi Jinping government to tighten control over media which question its policies. Authorities have increased scrutiny of entertainment news, celebrity gossip and news on political and social issues that put the Communist Party at unease. According to researchers from the Citizen Lab, a cyber security research group, China’s Search Engines have more than 66,000 rules controlling content.